It’s Time to Reduce Rates, Continue to Provide the Best Coverage in the U.S. and Protect the Future of No-Fault Insurance in Michigan

Lansing, Mich. – The Michigan Insurance Coalition today called on the Coalition Protection Auto No-Fault (CPAN), the Trial Lawyers and others making a living off the No-Fault insurance system to join in the effort to save No-Fault by helping make it more affordable for all drivers.

Last week, Kevin Clinton, Commissioner of the Office of Financial and Insurance Regulation (OFIR), said, “It’s time we moved past the issue of so-called ‘transparency’ – it is a red herring that is intended to distract from the public hearing the facts…The information is out there, and it’s time to have an objective discussion.” In fact, that information is available online at:

In the past, CPAN and others have employed a stalling tactic by calling for an independent analysis of the Michigan Catastrophic Claims Association (MCCA) to determine why costs are going up. The MCCA already contracts for two independent actuarial studies each year to determine the rates charged to insurers by the MCCA that add to the cost of auto insurance. Having a third study of the data will not change what is driving up the cost of No-Fault insurance:

  • The average automobile insurance medical claim has risen by more than 300% this decade, from $13,000 to more than $45,000 (see chart below).
  • The total cost of claims reinsured by the MCCA (claims over $500,000) has risen by more than 300% this decade from less than $300 million to almost $1 billion (see chart below).
  • Family attendant care is now almost 40% of the MCCA cost with some families being paid for 24 hours per day, seven days per week, totaling $250,000 to $300,000 per year- to care for a family member.
  • Hospitals and other medical providers are billing auto accident victims 300% to 400% higher fees than they charge for the exact same service provided outside the auto insurance system.

The system can no longer allow hospitals, providers and brain injury clinics to price gouge law-abiding citizens who are forced to purchase automobile insurance. Since 1979, the MCCA estimates there have been $9 billion paid for catastrophic claims with approximately $85 billion in total catastrophic liabilities.  The approximately $13 billion available in assets means there is more than  $60 billion in unfunded liabilities in the no-fault system.

“Michigan’s no-fault auto insurance system is in desperate need of reform and it’s time for the no-fault abusers to tone-down their rhetoric,” said Kurt Gallinger, Chairman of the Michigan Insurance Coalition. “Controlling medical costs will save the no-fault system and make auto insurance more affordable while still providing the most generous automobile insurance benefits in the nation.”

Average Michigan PIP Claim: 2000-2012Average Claim Per State: 2010MCCA Payments Per Fiscal YearFor all of this information and more, visit


The Michigan Insurance Coalition is a Lansing-based state property-casualty trade association. MIC’s members are insurers who annually serve customers who purchase more than $4 billion worth of insurance coverage in Michigan alone. Some of MIC’s largest members have their national headquarters located right in Michigan. All of MIC’s members proudly employ thousands of Michigan residents directly and contract with thousands of individual agents to help serve their customers.